Kirjner is projecting 2013 revenue of $6.44 billion, with $5.76 billion of that coming from ads and the rest from payments and “other fees.” That is below the average Street view of $6.54 billion. Kirjner’s diluted EPS estimate of 65 cents for the year is also below the Street’s 67-cent estimate.

Such a deceleration in growth, if it happens, might be only a “temporary setback,” he believes, nevertheless, if it occurs, it could “drive additional downside pressure on the stock beyond what is already reflected in our price target.”

Facebook’s share of global display ads may double from 9% today to 18%, he opines, given three advantages: scale, the target data given to advertisers via the “social graph,” and better delivery of ads because of “user authentication.”

However, that still implies a deceleration, he writes:

This trajectory and the associated valuation implicitly assume that advertising revenues grow at 38% Y/Y in 2012 and 32% in 2013, that is, that the rapid deceleration in annual advertising revenue growth observed in the last few quarters, from 77% in 3Q11 to 44% in 4Q11 to 37% in 1Q12, is drastically reduced, e.g., with changes in the company’s go-to-market approach or product availability.

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JUNE 4, 2012 12:51 P.M.

Randle Alford wrote:

An EPS estimate of 93 cents next year is not less than 67 cents. It is possible that teh 93 cents could
be an ebitda estimate whereas the 67 cents is a bottom line figure.

JUNE 4, 2012 12:54 P.M.

Tiernan Ray wrote:

Randle: Actually, the 93-cent estimate is Kirjner's estimate for 2014, not 2013, and it was my mistake for comparing it with the 67-cent Street estimate for 2013. Kirjner's diluted EPS estimate for 2013 is actually 65 cents. My apologies for the error.

company is way over valued. so what it has millions of users? its free thats why, i never paid for anything and will never pay or buy anything from fb. and if its not free anymore, i would just go to google+.

5 bucks a share would be proper for this company stock.

investors bought into the hype without understanding revenue stream from fb. they took a leap of fatith with other peoples money. they should've jumped out the window instead.

JUNE 4, 2012 1:12 P.M.

Dave wrote:

If anything, that good-for-nothing Bernstein Research’s analyst Carlos Kirjner just wanted to make a name for himself by adding salt to FB's wounds.

JUNE 4, 2012 2:02 P.M.

Block The Facebook Buyout Of Instagram wrote:

The FTC/SEC should absolutely block Facebook from buying one of its strongest competitors -- Instagram. Instagram is a photo based social network that now has 40,000,000 users. its one of the strongest competitors facebook has seen to date. Facebook has network effects. Without network effects Mark and Co. would have had strong competition a long time ago. Instagram is one of the few companies that found a hole in Facebook's armour through its early jump on mobile platforms. It would be a shame to simply watch Facebook buy away the competition. Do the right thing FTC/SEC and block the buyout. Make Facebook compete.

JUNE 4, 2012 2:50 P.M.

Anonymous wrote:

P/E 15 X EPS 0.39 = $5.85
This is a fair price entry point for me. Any price higher than that, I need a deeper consideration.

JUNE 4, 2012 4:07 P.M.

Ponsonby wrote:

I first began using the internet in 1998. During the intervening 14 years, I don’t recall having ever once “clicked on an ad” and I don’t foresee there being circumstances ever in the future wherein I would do so. I have never been on Facebook and don’t expect ever to be, given the nature of the thing that it is.

Early on, I decided utterly to ignore advertising and to invest my money rather than to spend it. There is no future whatever in spending money but a splendid one in saving and investing it.

Almost all products that are advertised are more or less junk, things no one really needs and in most cases no one really wants.

Did you ever notice that rich people do not buy things, that they sell things instead? The 1% we hear so much about are the people who own the companies that sell you the junk, the continuing purchase of which keeps you poor.

If you’re of a mind to end up, when you are 70 [and it is too late], parking cars under the direction of a teenager, keep buying things you don’t need…keep “clicking on ads”.

If you want to have some net worth upon which to retire, then do as I did: ignore advertising and begin investing your money instead. You can buy the tocks of very fine companies such as Becton Dickinson, St. Jude Medical, Baxter International, Johnson & Johnson [the list is almost endless] through company sponsored plans allowing small purchases, purchases that can really build up over time. You have to be patient, but, I assure you, the result will be stunningly more pleasant than waking up at age 60 with the assets of a squirrel.

On the other hand, if working for a teenager when you are 70 appeals to you, keep going onto Facebook and clicking on ads. The choice is yours.

JUNE 4, 2012 4:18 P.M.

FB vs. IVN wrote:

Hype was the safety and security of Gold. The choice is clear. Be wise and make the right choice.

JUNE 4, 2012 4:24 P.M.

Tim In Indy wrote:

I wouldn't invest in anything run by Zucker. Look giving him his due. The guy created a remarkable social media company. BUT and I don't mean this in a mean way. Zucker is a freaking geek. He may be brilliant but he's 28, he has no social consciousness. Showing up at investor road shows in a hoody? C'mon!! Oh haha soo funny. NOT. It's not funny now if you are losing money. Zucker didn't want to go public. But FB is now a publicly traded company owned by shareholders. Zucker needs to show he care's about his investors. Something I don't believe he cares about at all. Analyst may be right. Zucker should make himself Chairman and hire someone to run the company or at least put a person in charge to deal with investors.

JUNE 4, 2012 4:33 P.M.

Dale Barth wrote:

A small invester can't afford a google or an apple but has a long term chance to own a $300 Company at these prices. In vest for the future, not for the minute!!!

JUNE 4, 2012 5:44 P.M.

Tim wrote:

There are so many hypcrites who keep bashing FB but using it everyday as if they can't live without it!

JUNE 7, 2012 4:19 P.M.

D Clayton wrote:

If you post this on your local news media that Facebook spy on!!!!
:::Google " The Koch brothers Exposed" and see who the right wing republicans tea baggers and facebook take their orders from!!!!

Facebook is now disabling peoples accounts (Censorship) that post anything against the Koch brothers, Roves’ PAC or the tea bag party on any website that they monitor!!!!

You can not post on any of your local news sites when Facebook censors you!!!!!!
Also is it true that facebook is selling personal information (passwords) to international corporations????

About Tech Trader Daily

Tech Trader Daily is a blog on technology investing written by Barron’s veteran Tiernan Ray. The blog provides news, analysis and original reporting on events important to investors in software, hardware, the Internet, telecommunications and related fields. Comments and tips can be sent to: techtraderdaily@barrons.com.